cash and current recievables

Cash and current - CASHANDRECEIVABLES I Flows. A 1.Currencyandcoins 2..Ifrestri

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CASH AND RECEIVABLES  I. Cash and Cash Equivalents are combined on the Balance Sheet and Statement of Cash  Flows. This fact must be footnoted in the Summary of Accounting Principles A. Cash-medium of exchange available for immediate use 1. Currency and coins                              2. Balances in bank accounts. If restricted, the balances are investments, not  cash                              3. Undeposited receipts  such as checks and money orders from customers, if  not                                           postdated B. Cash equivalents are short-term, highly liquid investments that can be readily  converted to cash.  1. Money market funds 2. Treasury bills 3. Commercial paper 4. Bank CD’s II. Internal Control  A. General 1.  Encourages adherence to company policies and procedures 2. Enhances the reliability and accuracy of accounting data  3. Promotes operational efficiency  4. Minimizes errors and theft 
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B. Internal Control Procedures  for cash    1. Separate responsibilities for handling cash, recording cash transactions, and  reconciling cash balances. 2. Match the amount of cash received with the amount of cash deposited.  3. Close supervision of cash-handling and cash-recording activities. III. Accounts Receivable- Trade Amounts due from customers for credit sales. A. Credit sales require: 1. maintaining a separate account receivable account for each customer. 2. accounting for bad debts and sales returns that result from credit sales 3. Credit sales and the resulting accounts receivable are recorded net of trade  discounts, not at list price. B. Cash Discounts  - 2/10,n/30                     Discount percent                    Number of days discount is available                    Otherwise, net (or all) is due                     Credit period C. Gross Method                    Sales are recorded at the invoice amounts.                    Sales discounts are recorded if payment is received within the discount period
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This note was uploaded on 12/13/2010 for the course ACCT 112 taught by Professor King during the Spring '08 term at Howard County Community College.

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Cash and current - CASHANDRECEIVABLES I Flows. A 1.Currencyandcoins 2..Ifrestri

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